Asian markets slip as dollar edges back to record lows

Investors mostly sold off stocks in Asian trade Thursday as the dollar slipped back towards 15-year lows against the yen on expectations of new monetary easing measures in the United States.

The strong yen weighed on Japan’s key exporters, including video game giant Nintendo, which Wednesday announced the surging currency had forced it to more than halve its profit forecast.

Tokyo’s Nikkei slumped 1.99 percent, or 190.03 points, to 9,369.35.

Nintendo tumbled 9.34 percent, due both to the yen’s strength and after it announced it would not release its 3DS handheld console before Christmas.

Export companies, which are the main driver for Japan’s tentative economic recovery, fell as the dollar dropped to 83.35 yen in Tokyo morning trade, from 83.72 yen in New York late Wednesday.

The greenback is well off the high-85 yen level it reached after Japanese authorities intervened in the currency markets for the first time in six years on September 15.

Fears are now growing that the dollar could slip back to the 82.86 yen level it hit before the intervention, which was its lowest since 1995.

Although Tokyo has said it will sell more yen again if needed, the dollar is being pressured as most dealers now think the United States will inject more cash into its economy in a bid to kickstart its recovery.

The Federal Reserve has said it is prepared to support the US economy as it struggles to emerge from its worst recession in decades.

“The trend of the weaker dollar against the yen is continuing as expectation of the Japanese authorities’ intervention in the currency market is overwhelmed by the expectations of an intervention by the Federal Reserve,” said Barclays Capital in a note to clients.

The yen was also higher against the euro, with the European single currency at 113.18 yen compared with 114.08 in New York.

The euro bought 1.3580 dollars, down from 1.3625 in New York, its strongest level since mid-April.

“Investors are still worried about the yen’s strength, so they don’t want to chase the market higher,” Hikaru Sato, senior technical analyst at Daiwa Securities Capital Markets, told Dow Jones Newswires.

Sydney slipped 1.34 percent, or 62.1 points, to 4582.1, while Hong Kong was 0.28 percent off by the break.

However, Shanghai rose 1.49 percent in afternoon trade after the latest government moves to rein in soaring property prices proved less stringent than expected.

Regional traders followed a weak cue from the United States, where the Dow fell 0.21 percent.

On oil markets, New York’s main contract, light sweet crude for November delivery, slipped 10 cents to 77.76 dollars a barrel. Brent North Sea crude for November gained four cents to 80.81 dollars.

Gold opened at 1,306.80-1,307.80 US dollars an ounce in Hong Kong, down from Wednesday’s record high closing price of 1,310.00-1,311.00 dollars.

In other markets:

— Seoul ended 0.34 percent, or 6.36 points, higher at 1,872.81.

— Taipei was flat, edging down 3.11 points to 8,237.78.

Formosa Plastics fell 0.18 percent to 76.7 Taiwan dollars while TSMC rose 0.81 percent to 62.0.

— Manila fell 0.27 percent, or 10.98 points, to end at 4,100.07.

— Wellington closed 1.51 percent, or 48.79 points, lower at 3,178.09.

Telecom closed down 2.9 percent at 2.02 New Zealand dollars and white goods maker Fisher & Paykel Appliances ended 1.7 percent lower at 57 cents. Fletcher Building slipped 3.5 percent to 8.06.